Press Release: World Bank and the IMF Launch Joint Initiative to Support Developing Countries in Strengthening Tax Systems
IMF News, July 10, 2015
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- Press Release: World Bank and the IMF Launch Joint Initiative to Support Developing Countries in Strengthening Tax Systems
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Bibliographic details
- Published: July 10, 2015
Overview and purpose
- Press Release No. 15/330; July 10, 2015.
- The World Bank and IMF are launching a joint initiative to help developing countries strengthen their tax systems.
- Motivation: Many lower-income countries have the potential to increase their tax ratios by at least 2–4 percent of GDP, without compromising fairness or growth.
- Context: Announcement made ahead of the “Financing for Development” conference in Addis, Ethiopia, where scaling up finance to meet the Sustainable Development Goals (SDGs) is a central topic.
Key findings and analysis
- Analysis suggests the potential to raise tax ratios by at least 2–4 percent of GDP in many lower-income countries.
- Raising additional revenues through improved tax systems would allow developing countries to fill financing gaps and promote development.
- Existing Bank and Fund engagement:
- The World Bank has current tax programs in over 48 developing countries.
- The IMF has tax-related technical assistance projects in over 120 countries.
Initiative pillars
- Pillar 1: Deepening the dialogue with developing countries on international tax issues to help increase their voice in international debate on tax rules and cooperation.
- Pillar 2: Developing improved diagnostic tools to help member countries evaluate and strengthen their tax policies, including creating new methodologies where needed.
- The diagnostic effort would complement the launch of the Tax Administration Diagnostic Assessment Tool (TADAT) in November.
Institutional roles and collaboration
- By leveraging collective expertise, the Bank and Fund aim to play a fuller role in helping member countries achieve the ambitious global goals to be set later in the year in New York.
- Priority: Bring the voice and interests of developing countries, particularly those too small to play a role at the G-20 level, more fully into the debate on international tax policy issues.
- Continued collaboration with other development partners, including the OECD, in expanding tax work.
Statements from leadership (selected quotes)
- IMF Managing Director Christine Lagarde: “A strong revenue base is imperative if developing countries are to be able to finance the spending they need on public services, social support and infrastructure. But experience shows that with well-targeted external technical support and sufficient political will, it can be done.”
- World Bank Group President Jim Yong Kim: “We very much want to help developing countries raise more revenues through taxes because this can lead to more children receiving a good education and more families having access to quality health care. If everyone pays their fair share – developing countries can close their financing gaps and promote inclusive growth.”
Policy implications and recommended actions
- Strengthen revenue bases to finance public services, social support, and infrastructure without compromising fairness or growth.
- Provide well-targeted external technical support to implement tax policy reforms.
- Ensure sufficient political will and country ownership for tax reform implementation.
- Increase developing-country participation in international tax policy dialogue to ensure rules and cooperation reflect their interests.
- Develop and deploy improved diagnostic tools and methodologies to identify priority tax reforms and design requisite implementation support.
Media contacts
- IMF Communications Department, Media Relations: media@imf.org; Phone: 202-623-7100
- World Bank contact: Nicole Frost, (202) 415-6302
- IMF contact: Ismaila Dieng, (202) 623-9758
Source: IMF Press Release No. 15/330, July 10, 2015.